Directors of telecommunications giant- MTN Nigeria Communications Plc, on Friday presented its unaudited financials for the half-year ended June 30, 2019, a highlight of which was the offer of N2.95 dividend per share (READ MORE), representing about 60.6% of its Earnings Per Share of N4.86 each.
Revenue for the period stood at N566.946bn, representing N61.388bn or 12.14% rise when compared to the N505.667bn reported in the preceding half-year, while other income climbed to N48.062bn from N45.432bn.
Direct network operating cost dropped by N31.566bn or 21.12% from N149.443bn to N117.877bn; with base station leases accounting for N79.74bn, after dropping from N113.054bn; network maintenance grabbed N23.053bn, compared to the previous N22.709bn; while regulatory fees stood at N14.52bn, as against N13.096bn in the preceding half-year. Valued added services costs fell to N5.997bn from N10.286 in the first half of 2018, representing a decline of N4.289bn or 41.7%. Cost of handsets and other accessories in the corresponding period of 2018 increased by N1.825bn or 51.24% from N3.561bn to N5.386bn. Interconnect costs rose to N52.358bn from N46.769bn; roaming costs dropped to N1.732bn from N2.54bn; transmission costs stood at N2.821bn from N2.736bn; just as employee benefits increased to N14.979bn from N12.42bn, the lion’s share of which was the N12.97bn on salaries and wages, a drop from N10.324bn. Discounts and commissions for the period inched to N27.449bn from N25.023bn.
Advertisements, Sponsorships and sales promotions increased to N8.514bn from N7.958bn; other operating expenses increased to N28.017bn from N26.346bn; boosted by the N9.338bn bad debts written off, which rose from N7.746bn, and the N8.733bn reversal of impairment of other receivables, which dropped from N9.467bn. Insurance cost dropped from N12.555bn to N11.132bn; maintenance cost fell from N7.012bn to N6.333bn; just as depreciation jumped to N72.61bn from N68.341bn. Depreciation on right of use assets amounted to N27.377bn, an item that did not appear in the previous half-year, which means that the profit could have been higher but for this line item. Amortisation of intangible assets climbed to N14.476bn from N13.028bn; following which operating profit inched N53.902bn or 39.49% from N136.501bn to N190.403bn.
According to the breakdown of the earnings, customer business unit contributed N477.478bn, up from N438.29bn, out which direct costs amounted to N100.023bn, as against N92.665bn in the prior half-year; leaving a gross margin of N377.454bn. The Enterprise Business Unit (mostly products and services targeted at corporate and small-medium organizations) followed with N69.888bn in revenue, up from N53.602bn; just as cost rose to N6.181bn from N5.761bn; leaving N63.706bn margin, up from N47.84bn. The wholesale business unit contributed N19.579bn to revenue, compared to N13.774bn, just as it incurred N489.485m costs, up from N344.368m; following which margin climbed to N19.089bn from N13.43bn.
A further breakdown showed that airtime and subscription continued to contribute the bulk of revenue, accounting for N359.033bn, up from N327.203bn; followed by data with N103.321bn from N79.471bn; interconnect and roaming income amounted to N62.056bn from N50.998bn; while short message service fetched N7.058bn, up from N6.938bn; among others.
Finance income dropped from N12.366bn to N10.484bn; driven by a net gain on amortised cost investments, which rose to N4.998bn from N4.41bn; while interest income on bank deposits dropped from N5.197bn to N3.502bn; just as foreign exchange gain climbed from N488.817m to N1.594bn. Finance costs however soared by N18.578bn or 45.87% to N59.09bn from N40.512bn in the previous half-year, lifted by interest expense on leases, which was nil in 2018, stood at N33.459bn; followed by interest expense on borrowings, which dropped by N18.835bn to N20.784bn. Time value accretion on regulatory fine dropped from N11.658bn to N4.872bn; other interest expenses fell to N1.379bn from N2.213bn; just as foreign exchange loss nose-dived from N5.743bn to N540.892m.
Profit before tax notched 30.86% to N141.797bn from N108.354bn; just as income tax expense for the period climbed to N42.866bn from N34.959bn, following which net profit stood at N98.93bn from N73.395bn, representing an increase of N25.535bn or 34.79%.